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The impact of Random House price increases

Musee Mechanique

Musee Mechanique

As many of you know, last week Random House raised its Overdrive ebook pricing a lot. Not 20-percent-a-lot. More like 300-percent-a-lot. Enough so that a cart of 9 ebooks I had in Overdrive, only some of which were Random House, suddenly bloated to nearly $500 before I deleted the RH titles… dropping the total to $78.

Here’s how this price increase impacts the reading ecology:

If librarians fill demand for RH titles, we have to buy fewer books from other publishers… not to mention fewer RH copies. If you’re responding to user demand for the most popular titles, that means more small publishers go on the chopping block. (Adios, Cassoulet!)

If you reduce the number of RH copies you purchase, your users now have much longer hold waits for these books. Like everything else in life these days, something that is a public good is rationed through an increasingly narrow funnel.

If librarians do as I did and stop buying RH ebook titles (because I’m not running a public library, and our popular-reading is important but not our top-tier priority), readers who want these books only have the paper option. You may say that’s perfectly fine, but stay with me while I detour to discuss in brief one of the less-insightful commentaries that emerged.

Over on TechCrunch, a writer opines that this price increase is a necessary evil. Devin writes, “These companies are faced, after all, with the prospect of selling one book and having it lent to a hundred people at once (though that is not the case here)” — my emphasis.

Right, it’s not the case here. The way Overdrive works, books are “checked out” just like paper books. These books can’t be renewed, and they can’t be loaned to others. One person, one book. We’re all aware it’s a horseless carriage of a workaround based on a known model, but all the players do get how it works.

Furthermore — and this is where the comment about paper comes in — for all the enormous, sparkling crocodile tears trickling down the face of Random House, as Bobbi Newman pointed out on Twitter, they had a boffo good year last year in re profits, and a lot of that was due to ebooks.

Why shouldn’t they have had a good year? They now have a supply channel that (to turn the publishing industry’s own NewSpeak back on itself) is almost frictionless. They don’t have to print, predict, ship, store inventory, ship it back when it’s not sold, or pulp it. I’m no tax lawyer, but I also suspect that publishers get a major revenue boost by no longer having taxable inventory sitting in physical warehouses.

And of course, publishers aren’t turning any of this revenue over to the people who make the books worth reading — the authors.

If you read the ensuing comments on the TechCrunch post, you’ll see that the author subscribes to the publishing-world-is-going-away model (or at least backpedals to that idea, in the face of indignant responses). In this model, if I’m reading him correctly, the publisher’s behavior is rational (if not appropriate) because they’re raking in money before Everything Changes and the current publishing model disappears — which I suppose we could label as thoughtful behavior for publishing execs whose children expect to go to college.

I won’t spend more time guessing what this writer believes, but what I believe in is nothing less than Ranganathan’s First Law: Books are for use. They don’t exist if people can’t read them–can’t read them because they can’t access them; can’t read them because they, or agencies acting on their behalf, such as libraries, can’t afford them. Books exist for us, for the life of the mind, to build the public intellectual commons.

Librarians aren’t stupid. We know that a lot will change in publishing and libraries, even in the next few years. Some of it will be traumatic and difficult, but some of it will be amazing and wonderful. And at core, the enduring values will abide. We as librarians believe in books, believe they belong in people’s hands, believe in the right to read, believe in authors, believe in readers, believe that reading changes lives, believe, believe, believe in what we do. And we also believe there will always be not just a need, but an innate urge for intelligently-composed, well-edited, carefully-curated intellectual content — some of which, for a very long time to come, if not forever, will be realized in booklike objects, shared within a reading ecology.

Where we go forward at this moment is important. I appreciate ALA talking to publishers. I understand the place we’re in. But so far, what’s been happening hasn’t had any effect; as I pointed out last week, it’s almost as if the publishers are thumbing our noses at us. If anything, despite our best efforts and strategies, we’re beginning to look  a little bit Neville Chamberlainish.

Exactly what’s next is unclear to me, but about a year ago a friend approached me with an idea: what about legislation? At the time, I wondered why or how that would work. Right now, I’m wondering why it wouldn’t.

I’ll close by repeating a comment I posted to my own blog last week, because it involves a working strategy:

Note that publishers have had their eyes on libraries for a long time. A pioneering librarian, Marvin Scilken, led the charge to expose imbalance in bookstore/library pricing decades ago, which resulted in an agreement on library pricing that no doubt has stuck in publishers’ craws ever since. (See his Wikipedia bio, cf. the section “1966 Senate Hearing on the Price Fixing of Library Books.”) Depending on who is in office, there would have to be some similar sympathy these days. Studying those hearings and their arguments might be useful. (Just like studying librarians of yore is valuable. Definitely at least one entire week in my Fantasy Library Class.)

How Marvin proceeded, and succeeded, might be a very useful research question to pursue in the ALA library and ALA archives — and could be a great class project for that class I don’t have time to teach. But one thing’s for sure: the good work Marvin did in 1966 is now being upended. Then again, maybe, in its own way, it can be repeated.




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  1. Hmmmm. Could indeed be a good class project. Thanks; you might see results this summer. :)

    Monday, March 5, 2012 at 10:54 pm | Permalink
  2. Tim Spalding wrote:

    No surprises here. You yourself admitted this sort of thing would happen quite recently. So do the math out. Imagine the future that is already clear: all the major publishers adopt a similar model. Prices rise across the board until each check-out costs roughly equal to the purchase price. All concept of libraries “owning” ebooks falls by the wayside.

    Assuming this, libraries face terrible choices. Do they continue hollowing out their print collections to purchase ever-decreasing numbers of ebooks? Do they start limiting patrons’ check-outs? Do they fire staff to make way for a 10x increase in ebook prices?

    Most of all, do they continue pushing their patrons toward a format that threatens their present, their future and in its architecture of control and restriction the unique value that created libraries in the first place and the values that animate them?

    What exactly is lost by getting off the bus here? Some patrons want ebooks. Very few will ONLY read ebooks. Almost none would insist on them if they knew the mortal danger it presented to libraries.

    Tuesday, March 6, 2012 at 1:15 am | Permalink
  3. Ann Perrigo wrote:

    My little library, with its little budget, will not be purchasing Random House ebooks. Wish I had thought to get an order in before the price increase, but now it’s too late. I will pursue other options to provide ebooks to our patrons.

    Tuesday, March 6, 2012 at 8:43 am | Permalink
  4. Gimme Books wrote:

    Look, those publishers also depend on libraries to keep buying their backlist titles when they get damaged or disappear. That’s where the power of libraries comes in. ALA, how about collecting facts and figures from libraries about the titles, quantities, and prices of the books we replace on a monthly basis? Imply to the publishers that we have an economic lever that could have more of an effect on their bottom lines than the pricing of their ebooks.

    Tuesday, March 6, 2012 at 12:59 pm | Permalink
  5. Diane Hillmann wrote:

    I’m not a Random House author, but if I were, I’d wanna know about this, because it would affect MY bottom line, not just RH’s. Perhaps ALA (or somebody else who enjoys discomfiting the comfortable) could send something to all RH authors explaining to them why their royalties dried up? I’m thinking here about the ruckus raised by the Elsevier boycott–maybe the authors should be boycotting here?

    Tuesday, March 6, 2012 at 5:52 pm | Permalink
  6. Timothy Gillis-Jones wrote:

    It is very interesting to read about this issue as very similar things are occurring here in Australia. The question of providing e-books to patrons is one that is almost certainly going to occupy a significant portion of my early working life (I am currently a masters student looking at getting into libraries), and it is a question that has no easy answer. However, some of the suggestions presented by you and some of the people in the comments provide some interesting possibilities. I don’t agree with ‘getting off the bus here’, however, as history has shown that those who come to the table after a technology is settled usually fare worse then those who have a seat at the table while the uses and views of the technology are being formed in society. However it happens, we (as librarians AND library members) need to make sure that our needs and the needs of our patrons are not steam-rolled under the desire of both the publishers and distributors to make a profit.
    It will also be incredibly interesting to watch how this issue develops further in a number of countries, as some of the legal and political avenues available in the States may not apply in Australia. However, some of the avenues may be freely available for us all to proceed down as we shape the views and usages of e-books in the future.

    Saturday, May 26, 2012 at 10:09 pm | Permalink

4 Trackbacks/Pingbacks

  1. Random House eBook Price Hike Round Up | Librarian by Day on Tuesday, March 6, 2012 at 10:05 am

    [...] The impact of Random House price increases  (added 3/6/2012) [...]

  2. [...] Karen Schneider points out in her recent post about publishers, ebooks, and libraries: [...]

  3. [...] The impact of Random House price increases by K.G. Schneider [...]

  4. A Passel of E-book links « Babeltech on Friday, March 9, 2012 at 2:35 pm

    [...] I’ve seen so far is from Karen Schneider, who points out some eerie parallels between the Random House price hike and old fashioned paper book price fixing, which was made illegal in 1966, due in no small part to the work of pissed-off [...]

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